Pence says state will pay off federal unemployment loan, saving businesses millions
INDIANAPOLIS, Ind. (Oct. 22, 2015) – Gov. Mike Pence said the state will pay off a federal unemployment loan, a move that would help Indiana businesses avoid paying $327 million in taxes.
Pence made the announcement Thursday morning at Sensory Technologies in Indianapolis. As long as the loan is paid off by Nov. 10, 2015, businesses will avoid the Federal Unemployment Tax Act (FUTA) penalty looming in January. The penalty works out to about $126 per employee.
Indiana borrowed money from the federal government in 2008 to help pay unemployment benefits during the economic downturn. Pence said $250 million from the state’s $2 billion reserve will go to the Department of Workforce Development to pay off the loan.
Pence said the state will recoup its money by drawing upon the state unemployment fund next spring.